.jpg)
Scaling stablecoins around the world
Feb 2026
Nilmini Rubin, chief policy officer at Hedera, explores how stablecoins are emerging as a core component of global digital money, and why regulatory fragmentation risks undermining their cross-border potential
Image: Hedera
Stablecoins have shown that they are here to stay. As financial markets in general become digitalised, creating opportunities for new products, services, and business models — and as the innovations of digital assets and digital finance spill over into traditional markets — stablecoins will play an ever greater role.
Jurisdictions around the world will end up having different balances of the mix of future forms of money, depending on local market conditions and policy priorities. Consistent with consumer expectations, all forms of any given currency should be interoperable and work effectively across borders if we are to maintain a liquid, interdependent global financial system and economy.
Regulatory progress towards this objective is being made. Jurisdictions around the world have either put in place or are working towards building regulatory regimes for stablecoins, aimed at enhancing their role as digital money, ensuring appropriate consumer protections, and maintaining the stability of the financial system. Jurisdictions are progressing on this front: the US GENIUS Act last year, the EU’s Markets in Crypto-Assets Regulation (MiCA), as well as the UAE and Singapore in recent years. Many other jurisdictions are working hard to complete their stablecoin frameworks this year.
Welcome as all this is, there is one development we should all be concerned about: different jurisdictions with different regimes, or at least regimes that do not align on their fundamentals. This is particularly true for stablecoins whose major benefit is the ease with which they allow cross-border payments and value transfer.
Fragmentation makes supervisory work difficult, locks up liquidity in siloed regions, and (re)introduces the very frictions digital products are meant to remove.
Work is being done to address fragmentation. For example, the Bank for International Settlements (BIS) has led multilateral efforts to ensure cross-border payments are interoperable across chains and across assets and global standard-setting bodies such as International Organization of Securities Commissions (IOSCO) and the Financial Stability Board (FSB) have sought to create common principles.
Industry is adding its voice, for example, Global Digital Finance (GDF), a global trade association that seeks to advocate for best practice in the digital asset sector, recently launched its ‘Global Stablecoin Regulatory Playbook’ to advance a common conceptual framework for stablecoin regulation around the world.
Crucially, the Playbook does not say that every jurisdiction should have the same regulation. It recognises that countries have different needs, legal and regulatory environments. However, it does propose that principles underpinning these frameworks should be fundamentally consistent and compatible.
Bedrocks of good stablecoin regulation
There should be key principles informing every jurisdiction’s approach to stablecoin regulation which equip policymakers with the tools they need to supervise the market and support its scalable growth, irrespective of the detailed firm-facing requirements that each jurisdiction introduces.
As argued by GDF’s Playbook, policymakers should ensure that stablecoins are indeed ‘stable’ in the value of their denominated currency, that important issues such as convertibility, redemption, combatting financial crime and economic aspects such as yield (or interest) are treated consistently. Certain cross-cutting concerns such as proportionality, regulatory equivalence and supervisory cooperation are especially crucial to support trusted scalable global stablecoin networks.
Stablecoin regulation should be contextualised against broader geostrategic developments. For example, the Trump administration sees stablecoins as a vehicle to to maintain the dollar’s appeal internationally and the introduction of GENIUS should be seen as a core pillar of that strategy, as highlighted by Atlantic Council.
In response, and against the backdrop of geopolitical fragmentation, jurisdictions are adopting different approaches to the challenge of dollarisation via stablecoins, with most of them relying on some form of limit on either the holding or use of the US dollar stablecoin, or on strong localisation requirements.
Even leaving aside questions of monetary sovereignty, deposit flight concerns are also informing central banks’ approaches. In most jurisdictions, the jury is still out on how to make stablecoins less economically attractive than a bank account or at least introduce mechanisms that ensure stablecoins remain used primarily for payments, as opposed to being treated as an investment or store of value. The Digital Euro Association has written extensively on this matter.
In its Stablecoin Playbook, GDF writes about how to move past these challenges and what the benefits are for macro policy. They unpack how well-designed regulatory regimes for stablecoin issuance can benefit — rather than run counter to — national macroeconomic policy objectives.
For example, stablecoins can reinforce monetary sovereignty by increasing the digital use of the national currency. By requiring safe, liquid backing assets for the stablecoin, they can help drive demand for national sovereign debt, and by enhancing payment efficiency, they can position jurisdictions as competitive hubs for responsible digital finance and payments innovation.
Stablecoins and the digital finance ecosystem
Regulators and policymakers need tools that allow them to tailor domestic regimes without losing sight of the global context.
Efforts like GDF, and others, are under way to support this.
In the end, does it matter because stablecoins are here to stay?
Yes, for their own sake and for the benefits they can offer as tokenised forms of money. But also because fragmentation could have considerable knock-on effects on productivity, liquidity, global financial markets, and market integrity.
Stablecoins will be an integral part of the future digital economy.
But for this to happen in an orderly, seamless fashion, we need to ensure not just that regulation does not create new ‘walled gardens’ at the regional level but actively works to open up markets and the technology that underpins them.
Jurisdictions around the world will end up having different balances of the mix of future forms of money, depending on local market conditions and policy priorities. Consistent with consumer expectations, all forms of any given currency should be interoperable and work effectively across borders if we are to maintain a liquid, interdependent global financial system and economy.
Regulatory progress towards this objective is being made. Jurisdictions around the world have either put in place or are working towards building regulatory regimes for stablecoins, aimed at enhancing their role as digital money, ensuring appropriate consumer protections, and maintaining the stability of the financial system. Jurisdictions are progressing on this front: the US GENIUS Act last year, the EU’s Markets in Crypto-Assets Regulation (MiCA), as well as the UAE and Singapore in recent years. Many other jurisdictions are working hard to complete their stablecoin frameworks this year.
Welcome as all this is, there is one development we should all be concerned about: different jurisdictions with different regimes, or at least regimes that do not align on their fundamentals. This is particularly true for stablecoins whose major benefit is the ease with which they allow cross-border payments and value transfer.
Fragmentation makes supervisory work difficult, locks up liquidity in siloed regions, and (re)introduces the very frictions digital products are meant to remove.
Work is being done to address fragmentation. For example, the Bank for International Settlements (BIS) has led multilateral efforts to ensure cross-border payments are interoperable across chains and across assets and global standard-setting bodies such as International Organization of Securities Commissions (IOSCO) and the Financial Stability Board (FSB) have sought to create common principles.
Industry is adding its voice, for example, Global Digital Finance (GDF), a global trade association that seeks to advocate for best practice in the digital asset sector, recently launched its ‘Global Stablecoin Regulatory Playbook’ to advance a common conceptual framework for stablecoin regulation around the world.
Crucially, the Playbook does not say that every jurisdiction should have the same regulation. It recognises that countries have different needs, legal and regulatory environments. However, it does propose that principles underpinning these frameworks should be fundamentally consistent and compatible.
Bedrocks of good stablecoin regulation
There should be key principles informing every jurisdiction’s approach to stablecoin regulation which equip policymakers with the tools they need to supervise the market and support its scalable growth, irrespective of the detailed firm-facing requirements that each jurisdiction introduces.
As argued by GDF’s Playbook, policymakers should ensure that stablecoins are indeed ‘stable’ in the value of their denominated currency, that important issues such as convertibility, redemption, combatting financial crime and economic aspects such as yield (or interest) are treated consistently. Certain cross-cutting concerns such as proportionality, regulatory equivalence and supervisory cooperation are especially crucial to support trusted scalable global stablecoin networks.
Stablecoin regulation should be contextualised against broader geostrategic developments. For example, the Trump administration sees stablecoins as a vehicle to to maintain the dollar’s appeal internationally and the introduction of GENIUS should be seen as a core pillar of that strategy, as highlighted by Atlantic Council.
In response, and against the backdrop of geopolitical fragmentation, jurisdictions are adopting different approaches to the challenge of dollarisation via stablecoins, with most of them relying on some form of limit on either the holding or use of the US dollar stablecoin, or on strong localisation requirements.
Even leaving aside questions of monetary sovereignty, deposit flight concerns are also informing central banks’ approaches. In most jurisdictions, the jury is still out on how to make stablecoins less economically attractive than a bank account or at least introduce mechanisms that ensure stablecoins remain used primarily for payments, as opposed to being treated as an investment or store of value. The Digital Euro Association has written extensively on this matter.
In its Stablecoin Playbook, GDF writes about how to move past these challenges and what the benefits are for macro policy. They unpack how well-designed regulatory regimes for stablecoin issuance can benefit — rather than run counter to — national macroeconomic policy objectives.
For example, stablecoins can reinforce monetary sovereignty by increasing the digital use of the national currency. By requiring safe, liquid backing assets for the stablecoin, they can help drive demand for national sovereign debt, and by enhancing payment efficiency, they can position jurisdictions as competitive hubs for responsible digital finance and payments innovation.
Stablecoins and the digital finance ecosystem
Regulators and policymakers need tools that allow them to tailor domestic regimes without losing sight of the global context.
Efforts like GDF, and others, are under way to support this.
In the end, does it matter because stablecoins are here to stay?
Yes, for their own sake and for the benefits they can offer as tokenised forms of money. But also because fragmentation could have considerable knock-on effects on productivity, liquidity, global financial markets, and market integrity.
Stablecoins will be an integral part of the future digital economy.
But for this to happen in an orderly, seamless fashion, we need to ensure not just that regulation does not create new ‘walled gardens’ at the regional level but actively works to open up markets and the technology that underpins them.
NO FEE, NO RISK
100% ON RETURNS If you invest in only one digital assets news source this year, make sure it is your free subscription to The Digital Assets Edge
100% ON RETURNS If you invest in only one digital assets news source this year, make sure it is your free subscription to The Digital Assets Edge
